#decodedhybrid

[aviatorsbuzz]

The Indian automobile industry is undoubtedly one of the key pillars of our economy, contributing around 7.1 per cent to the GDP. Also, GOI aspires to increase the contribution of the automobile sector to India’s GDP by 12 per cent. Well, until now, the policies and actions do not align with the goal which GOI aspires to achieve. In fact, the friction between manufacturers, consumers and government authorities takes center stage whenever the topic of taxation on automobiles emerges. India is one of those countries which receives the highest tax on cars. Today, we provide an in-depth analysis of the GST we pay to the government to own a car.The government of India introduced a centralized taxation structure as GST (Goods and Service Tax) on July 1, 2017. GST rates on a car are 28percent standard across all the body types, fuel and passenger capacity. However, compensation Cess tax differs from vehicle to vehicle. Well, Cess is nothing but an additional tax applied to compensate for the loss in revenue upon applying new GST tax laws. Cess varies from 1 percent to a maximum of 22percent depending upon the size, fuel and engine capacity one opts to purchase. Passenger vehicles (petrol, CNG, LPG) with less than 4m in length and less than 1200cc engine are put into 1 per cent Cess bracket. Whereas, big SUVs with more than 4m in length, more than 1500cc engine & more than 169mm ground clearance are liable to pay a hefty 22 percent Cess. A detailed chart is put up for your better understanding.